In an age where brick-and-mortar retailers are wrestling with issues of creating lasting value and relevance, there are some homegrown retailers who are aiming for a pan India presence by offering the best to their customers.
One such regional retailer is Soch. From a humble start in 2003, when MD & CEO Manohar Chatlani’s family business of multi-brand clothing retail had just five stores in its repertoire, the brand is today 100-store strong.
Today, Soch has established itself across India as a key player in women’s retail with more than 100 stores, and now has plans to expand into the South East Asian markets. The brand plans to open their first international outlet by end of FY 2018.
Soch owes its growing presence to Chatlani’s continuous efforts to understand and decode the ever-changing consumer’s behaviour and needs. Today, astute business decisions and a sharp understanding of the consumer have led to Soch reaping rich rewards.
In an interview with IMAGES Retail Bureau, Manohar Chatlani talks about Brand Soch, his stringent quality control methods and business strategies that have helped the brand grow at a national scale.
Tell us about your brand Soch.
Soch is a very young brand. We opened our first store in 2005, second in 2008, and the third in 2009. From 2009 to 2017 we have opened 99 stores. We now have 102 stores in total and plan on opening another 40 stores by the end of 2018.
What is your brand’s USP? How do you woo consumers, especially Millennials?
The USP of my brand is the ‘best merchandise at a very fast pace’. We have 102 stores plus 50 counters in large format stores. That’s 150 stores along with e-commerce tie ups. Due to these large numbers, we can source in bulk. Since we pay manufacturers on time, we get merchandise on time, which then reaches the stores on time. Also, since we pay on time and in full, we get the best of merchandise, one of the main reasons we are patronized by so many consumers.
Are your stores company-owned or do you run a franchise model?
In bigger cities, where we have a warehouse, an area manager or strong staff presence, we prefer to go in for company-owned stores. However, in Tier II & III cities where we have just one or two stores and which are difficult to reach, we prefer to work on a franchise model.
How do you maintain quality in the franchise model?
Since we supply goods, quality control is done by us. In as far as service quality is concerned, we have an audit team, outside agencies who conduct mystery audits. Only when we are satisfied that everything is running smoothly do we hand over the reins of running a store to a franchise partner. If we are not satisfied, we appoint our own store managers – even for franchise stores –to ensure that service standards are maintained.
Apart from this, we have a regular training team, for all employees, including those at franchise stores. We prefer to pick partners who are well versed in the field of retail, who know the industry well.
What’s one foremost business strategy that has helped you grow?
We manufacture only about 3 to 4 percent of our product. We buy the product, but we buy in bulk. We buy in bulk and pay on time and hence we are able to get the best of goods. We source goods from the best of manufacturers from across the country. One reason that we don’t get into manufacturing is that it limits our taste and variety. If we employ an in-house design team, our breadth, taste and concepts would become very limited. In this way we get an opportunity to pick the best from in the country – specialized embroidery from Lucknow, prints from Jaipur etc. It also widens the spectrum of goods that we deal in.
Clicks or bricks – what is your preferred channel of sale?
Today, there is no option of clicks over bricks. Every retailer must go with both to succeed since competition is cutthroat and we have to be on our A-game to stay on top. At the moment 4 percent of our sale is clicks, and 96 percent is bricks. From e-commerce, in 2017, we have done approximately Rs 10 crore business and we will be actively scaling this up in the coming years. We see our online business growing to between 10-12 percent in the next couple of years. We have our own website, and we have marketplaces on Myntra, Amazon, TataCliQ, Flipkart and Ajio to name a few.
Tell us about your Omnichannel strategy.
We are working towards building a strong Omnichannel strategy for the better part of the last year. We have implemented the endless aisle as part of our Omnichannel strategy in 10-12 stores on a trial basis. This means if a costumer comes to any Soch store, he can choose from 400,000 to 500,000 garments across the eco-system of Soch – including from our warehouses – instead of just the couple of thousand in one store. This helps in consumer delight and satisfaction since they have such a huge variety to choose from.
In the same stores, we also give the consumer the option of ordering online and picking up merchandise from a store if that is convenient. If not, we can deliver the products to the consumer, at his doorstep. We plan to roll this out in all stores very soon.
Apart from this, we actively capture and study customer data, and track customer buying patterns online as well as offline. Of course, we are still in the process of refining all these techniques, but we are vigorously working towards achieving them.
In case of brick-and-mortar stores, do you have a location preference?
We prefer to open Soch stores on high streets, but unfortunately in every city there are only three or four streets which are workable. The advantages of being in a high street are that retailers more or less know how much business they are going to do. When you sign up for a mall, which hasn’t even been launched, you are taking a little bit of risk for you don’t know how soon they are going to be open to public, whether their cinemas, FEC zones and food courts will be good enough to attract crowds. A lot depends on these elements.
However, if we want to grow more, the only way is to go malls. In India, around 100 malls are coming up in another two years. Out of these 100, there are 25-30 that are brilliant, and we would like to be in all of these. At the moment, we have 48 high street stores and are present in 54 malls.
What is your pricing policy?
I think if you compare our range of the products, we are cheaper than most of the brands in our space with quality which is as good as the competition, if not better. Since we also manufacture some, we know the costs of manufacturing when we go to buy from outside manufacturers in bulk. And since we are able to strike the best of deals with our suppliers, we manage to offer our products to consumers the best of quality at affordable rates, making us formidable to the competition.
Tell us about the growing competition in your segment.
Luckily, in our space, there is not much of competition. We are an Indian ethnic wear brand and even if four or five brands like Soch emerge, there is enough scope for growth for all of us. When you consider the women’s ethnic wear segment – since we haven’t branched out into any other segment yet – approximately 10 percent of the share comes to the organized sector, which means huge scope for growth for us and our competition.
What are your expansion plans?
We are at a stage right now when we don’t need to raise funds for expansion. Our internal growth, luckily, is enough to fund any expansion plans that we have. Since we are also using the franchise route to expand, we don’t need much in the way of investments. The plan to keep expanding with the franchise model.
What is your expected turnover?
Soch expects to earn a revenue of Rs 425 crore in 2017-18 and is targeting a growth of 40 per cent on that in 2018-19. The Indian womenswear market was estimated to be worth Rs 1.128 trillion last year and grew at a compound annual growth rate (CAGR) of 11.4 per cent between 2011 and 2016, according to data from research firm Euromonitor International. And Soch believes they are perfectly poised to grow bigger than what they are today.